Any ecommerce sellers trading overseas will have been keeping an eye on the performance of Sterling in relation to the Euro and the US Dollar. And there is little good news.
This week, Sterling has declined by 2% to its lowest point since March 2009 and the Pound has had its 35th worst day against the USD since 1971.
Jeremy Cook of World First says of the situation: “Despite a positive reaction on Friday night to the announcement of a deal between the EU and UK which Cameron hailed as a victory, sterling has found itself back lower through the Asian session following the news that Boris Johnson will campaign for the UK to leave. His decision has prompted the single largest daily fall in GBPUSD for 12 months.
The pound has now lost over three cents today, tumbling by over 2.3%, as Boris Johnson’s decision to back the Out campaign continues to cause shockwaves through the international currency markets
Do we think that Boris Johnson’s decision to go one way or the other is worth a 2 cent move in GBPUSD? Absolutely not, but traders and investors have been waiting for an opportunity to give sterling a smack and the Mayor of London has handed them a big old bat with which to do it. At the beginning of the year we warned that the campaign into the vote would be pockmarked by some deep falls in sterling. Fundamentals remain strong here in the UK, but politics can always outweigh fundamentals.”
9 Responses
“And there is little good news.”
Surely this is good news for anyone exporting? An item priced at £10 would have cost a US buyer $15.80 last June. That same item would cost them $13.92 today. That’s definitely good news if you’re exporting UK stock as you’ve become more competitive. Hopefully we can get out of the EU and be permanently more competitive.
Richard how do you expect to be more competitive out of the EU? You can forget EU trade when you have to pay customs on every package.
Take for example sending a package to France and also sending one to Norway with any of the top couriers. Have a look at the price difference and then try to understand what an exit from the EU would mean.
It would be an enormous mistake.
What on earth is going to happen to the sterling/dollar rate when the United Trumpton States comes into being with it’s potentially anti-immigrant policies ? I have not seen any predictions for that scenario yet.
As far as our own situation goes, I really don’t care what happens to exchange rates or how much damage is done to our economy, providing we can get out of Europe and see British taxpayers money getting spent on British problems and needs. I will be hit hard perhaps, but no pain, no gain comes to mind, and I don’t want any more years of seeing foreign workers sending money abroad, which could and should be spent here.
I don’t live in a large city where that sort of thing is to be expected whatever happens, but in a smallish (less than 15,000 population) area with foreign workers mostly in the hotel industry, and currently having long-haul holidays, buying and furnishing homes in Eastern Europe etc, all being done with money earned here and spent overseas in their home country., rather than my home country.
Yo ! My house is going up 20% a year, if we are in our in or out.